Tax is a tool for managing inflation in the macroeconomy and not a mechanism for funding government spending.

Taxing the economy reduces demand and reducing demand when there are people with skills seeking gainful employment is a sin.

Tax is the best mechanism available to deliver a more equal, fairer society. All tax should be designed with that goal in mind.

There is no one tax that can solve all problems and meet all needs: a whole range of taxes is required as a result.

No tax exists to maximise its yield: all exist to be effective. That means the optimal revenue for some tax is precisely nothing because the issue that they address has been solved.

A good tax is clear as to purpose, clear as to who it impacts, clear as to who should pay it, and clear as to the penalty for not doing so, which non-payment should be clearly publicised.

Tax works best when all lay their cards face up on the table: the maximum possible transparency is at the heart of a good tax system.

Tax must be administered fairly. This starts with the provision of sufficient resources by government to make sure that this is possible and continues with an open and transparent tax authority that thinks itself accountable to all in society and not just the largest taxpayers.

Tax is fundamental to the ability of a government to deliver its chosen policies. As such an attack by one government on the ability of another to tax is an attack on the democratic decision making ability of that other country, and this cannot be tolerated in a world that respects the right to democratic self-determination.

There will always be those who cheat on taxes. Doing so is a crime against all that should result in ostracism from society as drink driving now does.

YI stress, I think these will need revision. These are a fifteen minute first draft.

Don’t we need a commandment referring to natural resources, wildlife and environmental limits?
Professor Anderson co-authored a report, commissioned by Friends of the Earth Europe, titled “Can the Climate Afford Europe’s Gas Addiction?” which says: ‘European Union nations can burn gas and other fossil fuels at the current rate for only nine more years before these countries will have exhausted their share of the earth’s remaining carbon budget necessary to keep temperature rise below 2 degrees Celsius.’
From Bonn in October Anderson said, “[By flying] we’re sending a signal to the airports to expand—almost every airport in the world is expanding. We are buying more and more planes. So we are locking in a high-carbon infrastructure.
… We’ve dealt with much of acid rain. And we somehow think that climate change is going to be the same. But it’s not, because it’s in everything that we do. It’s in the dyes in my jacket. It’s how we get here. It’s what keeps the lights on. It’s in the Formica on top of this table. Nothing has ever been that pervasive in human history before. And we have to remove this in just a handful of decades.
So this is a massive challenge. And I’m not sure we’re up to it. I think we have all the skills and tools. But whether we’ve got the courage and the innovative capacity to push that forward, I think the jury is out.” Full transcript at https://www.democracynow.org/2017/11/15/scientist_kevin_anderson_our_socio_economic

“I think there are some things tax cannot do
To a large degree I think the environment is where it meets its limits”

Of itself tax won’t do it. Money has to be put to work to be useful.

Without getting the tax right, the economy can’t work right.

Without getting the economy right we screw the biosphere.

You underestimate what you are doing (helping to do/working towards) which makes the rest possible – so no pressure then 🙂

We can’t afford to lose this. For as long as we need money we need taxes. The alternative is some sort of paradigm shift – completely different thinking. No chance anyone would understand that; it’s beyond what we can currently even think about.
Most people can’t even sensibly discuss MMT, UBI or JG.

This is why people love the idea of hypothecated taxes. Because the majority of people don’t accept your first commandment the ‘logic’ of hypothecation persists in being popular.

Lib Dems wittered on for years about a penny on income tax to fund the NHS.

It’s going to be very difficult to get this across while the vast majority of the people and their representative politicians on both sides of the house (and probably the other place aswell) who make tax policy believe in the ‘tax and spend’ proposition.

So much easier to persuade people the earth’s fossil fuels are generated abiotically.

Tax hypothecation is damaging, evil and wrong. It engenders a belief in a relationship between the money raised by a particular tax and the money spent on a particular public service. This encourages the view that people should pay for what they get and/or be able to opt out of particular services. Should the childless pay for schools? Should the healthy fund the NHS? Etc. It’s a slippery slope towards privatising almost everything, playing into the hands of JRM and his Alt-Right cronies.

Tax should be levied in a way that is effective, efficient and fair in order to achieve the desired economic impact. Public expenditure should be incurred in a way that is effective, efficient and fair order to achieve the desired social impact. Linking the two is counter-productive.

“I think there are some things tax cannot do. To a large degree I think the environment is where it meets its limits.”
What would be the economic impact of tradable rations? Tradable Energy Quotas (TEQs) [https://www.flemingpolicycentre.org.uk/teqs/] has been evaluated by government. Everyone gets an energy quota. Unused units can be sold to those who want more – which limits the access to energy of the profligate and redistributes wealth.
The housing regulations announced today will take decades to make much difference – by which time there may be a need to rehouse those driven out by sea-level rise.
New houses are bought for ‘second’ homes or left empty to appreciate in value. The already-well-housed buy extra space – 250,000 families have 8 or more rooms per person. The median is 1.8 rooms per person. A ‘tradable housing allocation’ of so many square metres of floor space per person (my postulate), even at a generous level, would change the trend, bring additional property on to the market – and reduce prices … which would need careful political management but would solve the housing crisis.

There are three elements of taxation that I would wish to highlight in ways I feel are slightly different to, or omitted from your ten commandments.

1. Taxes should only be selected where it is relatively cheap, and easy to collect it. If it is expensive to collect the tax, or difficult to apply there is something wrong with it.
2. Taxes should not be levied, which are easy to avoid or evade.
3. Taxes should not hinder either employment or trade. This is covered by your number “3”, I think but it seems to me this is a matter not only of morality, but prosperity.

I believe that these principles would shift the whole framework of tax; the way we look at it, and at economic activity, and how to make the economy work effectively for the population, and not against; or stoke division and anger.

First, given that we tax to achieve an economic or social purpose, we base the efficiency of tax upon the achievement of that purpose, not upon the cost of collection. You are still, erroneously, thinking that tax pays for government services, and that is entirely untrue.

Second, many taxes are easy to avoid and evade. In fact, that is almost universally true. In that case your comment makes no sense.

Third, this is a way of saying that labour and profit should be entirely untaxed. That is OK if you want a tiny government sector, which you would necessarily have on this basis because the capacity to reclaim the money injected into the economy by the government would be very small indeed, and so hyperinflation would result as a consequence of deliberately crippling the tax base in the way that you suggest. Is that what you want? I don’t

In practice There is absolutely no reason why labour and profit need not be taxed: there just needs to be a level playing field in their application and within the administration of the system

I would have thought I had commented enough here (and recently on MMT) to disabuse you of the proposition that I believe in “tax and spend”. Nor do I propose a small government sector; I do not think either necessarily flow from my propositions. Our goals are relatively similar (I do not doubt we will not agree on everything), but it is grossly unfair simply to insist that because I disagree with you on taxation policy, I do not understand money creation.

1. If you propose to tax activities that are easy to avoid or evade, then you strike hard at fairness; because the capacity to avoid is very unlikely equitably to be accessible to all. You also rely on “morality” almost alone to ensure that there is a “level playing field”. There won’t be; the crooks, chancers and charlatans will have the advantage. You may say I do not expect enough of people; I say that you expect too much. I also suggest that the record book – past experience – confirms my view.

2. I do think we should focus on taxes that are difficult to avoid or evade; and also on taxes that are cheap and efficient to raise: such as AGR (aka LVT). Currently we have a vast network of professionals, using considerable resources to carry out utterly pointless activities in tax advice, consultancy and the pursuit of unpaid tax, in a or more often avoidance; all wrapped up in a Byzantine tax system nobody understands. Simplify. Radically. Cheap and effective tax collection that hoovers up the necessary tax relentlessly, but fairly is the goal. What we have is like a mediaeval guild network. It has no purpose. If a tax is absorbing large resources to raise it, then it seems to me there is something wrong with the tax. This difficulty should be a marker that we need to consider eliminating the tax and finding a better one; not throwing resources at it to insist the unworkable works. I wish to remove most of the need for a complex tax profession altogether. As an output of the economy it produces nothing valuable in society. Let us focus on efficiently ensuring that the taxes are clawed back, for minimum effort. Why not? Occurs Razor – never multiply entities beyond necessity.

3. I subscribe to raising as much tax at source as possible, and therefore PAYE is powerful tool. I do not doubt that some income tax must be paid, but I think it must both be fair and should not be set a level that will be likely to affect employment or trade. This is a difficult balance and it is the stuff of politics.

I do not subscribe to your interpretation of the consequences of my position. Where we differ, perhaps is in the value you ascribe to the process of taxation. I simply wish the tax to be raised with the least effort and with the greatest simplicity; this assumes nothing about quantum. The tax system is a mess – especially from the perspective of the user of the system, who is not expected to understand it; delivering themselves into the hands of the “professional”. I repeat I want simplicity, and I cannot see why we cannot make far greater strides towards it than you at least appear to propose.

The point about the taxes that work best is that they are taxed at source or are particularly difficult to avoid or evade, In my view these are the best – and fairest – taxes (such as AGR, or on oil and other natural resources). You claim it is almost “universally true” that all taxes can be avoided or evaded; but in the real world the government actually relies most on those taxes that are in preactical terms difficult to avoid or evade.

I have not ruled out income tax, incidentally; but because it can often be avoided or evaded it is potentially unfair and requires to be handled with great care; it has also become too politically totemic/toxic because its importance has been inflated by the fact that there has been insufficient search for other sources – often because of vested interests who wish to protect certain advantages elsewher (most noticably in land – an economic problem needlessly exacerbated by the failure to tax it). It is noticable that when the Scottish Government varied Income Tax, they actually took time to think through what the implications might be on taxpayer behaviour, and attempted to finesse the resulting rate to compensate. This is a challenging process and I simply wish to seek out sources of taxation that are least problematic. I want new ideas, and above all simplicity in the tax system. I want people to see that the system is both equitable and unavoidable. This best cements the public confidence in the system.

In spite of being radical on economics and money creation, perhaps you are being less radical on taxation. I do not think your ten commandments necessarily does it; and honestly, Richard this is highlighted by your use of the term “sin”. You will note that I actually thought that we were not too far apart on your point 3, but I was trying to put what I still think is a more practical and usable proposition, than a bald appeal to virtue.

Your 9th item seems at odds with your regular criticisms of the “race to the bottom” of European Corporation tax rates. Surely governments set CT rates for economic purposes to attract international businesses, which then create jobs and generate PAYE and VAT revenues. Is that a good thing or not?

Failing to ensure that the rate is knlymused domestically is also economic warfare

knlymused

Love it.

At last a totally fresh approach to taxation.

I’m sharpening my pitchfork and tearing bedsheets to make banners demanding “no taxation without ‘kynlymusation’.” (I’ve already, you see modified the spelling so it trips better of the tongue)

The serious point you are making, that this is an act of ‘economic warfare’ in response to Bobby Wickham’s:
“What would be your mechanism for ensuring that governments making intolerable tax decisions are not actually tolerated?”

My initial thought was Type 37 Destroyer (?). So presumably at some level I instinctively felt this was unacceptable behaviour of some seriousness.

Presumably the acceptable solution has to be (ultimately) pan national agreements (?)